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Stocks Dip on Wall Street - 2001-10-30


Profit-taking on last week's rally on Wall Street drove stock prices sharply lower Monday.

The Dow Jones Industrial Average fell 275 points (nearly 3 percent) to 9,269. The tech-weighted Nasdaq composite lost nearly four percent (almost 70 points) while the broader Standard and Poor's 500 index dropped 26 points (2.5 percent).

Boeing weighed on the Dow Industrials, its shares down more than 10 percent. Boeing lost its bid last week for a huge U.S. military contract to rival Lockheed Martin.

And shares of Intel slid over six percent, after the leading chip maker announced plans to cut prices on some of its products.

Meanwhile, investors were bracing for a flurry of economic data this week, including third-quarter Gross Domestic Product (GDP). The GDP is expected to reflect a contraction in U.S. economic growth.

Third-quarter corporate earnings reports are almost all in. It was not a good quarter for most U.S. businesses.

Analyst Stephen Porpora says those profit shortfalls are discouraging for the market. "People are waiting to see some big name report that shows indications that earnings are turning here," he said. "And I think it has to come from more than one company, perhaps sectors. The medicals and health-related stocks have been really the one area that's been a stand-out. We're looking to see some other groups show some leadership in this market. I think that's what we're all looking for."

A big merger made news Monday. Satellite TV provider EchoStar Communications edged out media mogul Rupert Murdoch's News Corp. for Hughes Electronics, the satellite-broadcasting service of General Motors. News Corp. withdrew from the bidding Saturday after GM's board failed to name a winner.

EchoStar reportedly will pay nearly $26 billion in stock and cash for the acquisition.

The merger of the top two U.S. satellite broadcasters would create a powerhouse company with an estimated 17 million subscribers. The deal still faces regulatory questions.